The Digital Services Act and SMEs as users of online platforms

This report from UK think tank EPICENTER looks at new risks for consumers and SME users in the proposed EU bill.

The proposed EU Digital Services Act (DSA) aims to protect users of digital services, but unfortunately it also creates serious new risks for both consumers and SME users. The DSA should be more mindful that national authorities will likely have limited knowledge and motivation to safeguard interests of foreigners. The DSA gives far-reaching powers to national authorities to issue extra-territorial orders “against illegal content”. It also empowers “trusted flaggers” to notify platforms about illegal content. Such flaggers will be exclusively regulated in their country of establishment. Neither of those solutions provides potentially affected users with effective redress, even in cases of ideologically motivated orders or flagging. The DSA also attempts to increase transparency of online platforms, while forgetting about the interests of the users whose data will be subject to such transparency. In particular, the DSA risks destroying the SMEs that rely on their skill in targeting ads on large online platforms. The DSA will make their targeting criteria (e.g. keywords) public so that they can be copied for free by any competitor, including non-European ones.

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